Success Story: 50 Completed AirB&B Hosts: Great Return, Operating from Different Country, Time Spent, PITA, Lessons Learned, & Shout-Outs!

[J. Martin]

I’m netting 2-3 times what I normally would be renting this unit for w/o Airbnb! And running it like I’m out of the country! Sweet! :) But had some challenges and failures along the way. And some shout-outs to those who fed my knowledge..

So, after 50 completed guests, about 7 months, 3 uncleaned rooms, 1 clogged toilet, probably about 8 guest phone calls, about 100 inquiries/emails, 93% occupancy in YTD 2015, about an hour or two a month in personal time spent, and a failed attempt at getting “Superhost” status - I wanted to share my experience, success, challenges, and tips with any other hosts or those considering short-term furnished rentals.

My goal is to have this operation run like I am out of the country, even though the unit is where I live. And so far, it has been very close to that! (although I have not actually been out of the country, unfortunately). I have seen the inside of the unit a couple times in 2015. And did not need to. I think this has been well worth my time and will continue operating it, and consider more short-term rentals selectively for the right locations.

As of 4/29/15:

50 Completed Trips
71% Five-Star Reviews
100% Commitment Rate
98% Response Rate

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Challenges (& lessons below)

1) *MOST IMPORTANT* Have a Reliable Maid. And a backup w/ sheets & towels! She only missed 1 cleaning out of the first 35, due to a mis-scheduling. But then she missed 2 out of the next 15. One time I couldn’t reach her, and my handyman went out to clean it. The other, she had an incident with her car, and came back to do it later. She did it for free, and I waived the cleaning fee for the guest. They were both understanding, though it hit the reviews. With so many good reviews, I don’t think it really mattered. Although I left a little bad for them..

2) Blocked toilet (once). This was a classic “tenant calls and bothers you about a stopped toilet” – which I’ve ironically never had in the 14 other units I manage.. There was no plunger in the bathroom (my mistake. See Lesson #1 below on prep below.) If I were not next door, and instead on vacation where I should be, I would have called my handyman, and then my main to help out. Since I was home, I walked downstairs to the corner miscellaneous market, and plunged it myself (fun!). Then cleaned it and left it in there for the guests to do themselves in the future. So this is actually the least of my worries.

3) No Keys in Lockbox. Sometimes, the guest doesn’t put the keys back in the lockbox. Now, my maid has her own key. At the time, the downstairs commercial neighbor had keys to the building, and the unit has an electronic lock/code on it, so she could get in. But this could be worse if you don’t plan..

4) Time Spent. I estimate that I have about 5-8 guests come per month, and I spend about 10 minutes per guest on average. And another 10-20min or so on cleaner-related contact each month, payments, etc. Less on some; more on other months. So I estimate about 1-2 hours per month. If you divide the marginal additional income by the hourly time spent, it comes to many hundreds of dollars an hour. And it doesn't intrude on me inconveniently. So I think that is an good return. It's mostly just accepting requests, sending out emails, and I've considered having a VA or another service do it. That does not include the learning and set-up time to get started, and in the process until now, where I have it down to 1-2 hours per month. But I think this type of operation will come in handy many other times throughout my life, and am glad to have learned how to operate a short-term furnished rental unit successfully.

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Lessons I learned to help make my life easy, and me happy with this investment:

1) Get the room set up right with what people need. Pretend you’re a hotel guest, and live in it yourself for a few nights, or have a friend stay and give you feedback like they are a whining hotel guest. Get it all out of the way soon so you don’t have to field complaints or coordinate for that heater, extra blanket, pillow, towel, etc *and a plunger* while you’re supposed to be exploring that beautiful jungle in South America?

2) Get a reliable cleaning person and pay them to make it worth their while. (and give them an extra set of keys for when the guest doesn’t return their keys to the lockbox.) She makes $45 in about 45 min, and exchanges and cleans all sheets, towels, etc. Guest pays it. Try to find someone nearby so its not out of their way. How are you going to enjoy a temple in Thailand if you have to get down on your hands and knees to scrub the tub?

3) Get a lockbox (or 2)!! How are you going to bike over the beautiful canals of Amsterdam if you’re coordinating with people to exchange keys!? Waste of time too! And plans change! Yes, I’d like to chat with people all over the world, but I’d rather visit there, then visit them here, and I’m too busy to chit chat with every person who just wants a place to stay.

4) Write a detailed posting and answer FAQ in advance + Welcome Email. Whats nearby, parking situation, distance from airport, etc are all common questions. Answer them up front so you don’t get a question about it. Then have a detailed email to send them with address, directions from airport, how to get in, nearby stuff to do, link to yelp w/ filter for tasty restaurants near your house (just search on yelp, then copy and paste it), must-do’s in the neighborhood, etc.

5) Don’t go crazy trying to please people too much! (huh??) When Airbnb launched SuperHost status, it was an attempt to make every guest enamored with the wonderful host who took care, personal love, and attention into making the stay fantastic. The bar was also high: at least 4 out of 5 guests had to give a 5 star rating for every aspect of the stay! A little person-to-person interaction goes a long way with this. But I didn’t have the time for that. So I would check in on people by text, help point them to restaurants, spend a bunch of time making sure everything was perfect, check on how clean the room was sometimes, etc.

After getting so close to SuperHost status several times, I realized I did not have a desire to keep up that sort of effort on a continual basis, or to even care THAT much. Don’t get me wrong. I want everyone to have a GREAT stay, and make many organized efforts to achieve that, to keep my occupancy and nightly rate up. But I’m not going to break my back making sure that >80% have a FANTASTIC stay, for whatever that means for them.. At least for this price point.. So the bigger lesson here is to assess where the marginal efforts vs marginal returns lie, and choose where you want to be on that sliding scale. I’ve found a much better balance since analyzing that more closely. If you want to spend all your time making every guest happy, maybe run a true bed and breakfast and make it worth your time, or really love it and don’t worry about the financial return.

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Shout-outs!

First of all, thank you to:
 @Al Williamson for the suggestion on having bicycles, and his never-ending quest to increase income for landlords (although this time, I did “raise rents.”). I also got some ideas for improvements to my video ads for my other rental units from his operation. Thanks for the inspiration Al! I’m also considering testing out a bedroom rental model at one of my units in Richmond to see how much more I might be able to get. Still on the fence about how much time I’ll have to spend on tenant conflicts or turnover, but I’ll let you know if I do it.. Check out Al's book on 40 Ways to Increase Your Rental Income!

 @Johnson H., for his cautions on what to be aware of, challenges he faced, and the other side of the coin.. There are a lot of differences in geography, occupancy, room type, etc. that I think play into some of the differences. And I also don’t own the unit. So that makes the whole equation different also.. Thanks for sharing your experiences. And for the awesome meetup in San Jose!

@Mel Selvidge , who I chatted with about her vacation rental after I already had my own going. It’s interesting hearing about the larger units, per head cost, etc. I’ve been hesitant about converting another 2br unit, because my existing one is a mini studio, and the spread doesn’t seem as good over market rents, but I might try.. Hope your newbie/househacking meetup is kicking off to a good start! And thanks for coming out to help clean up Oakland!

@Arlen Chou, who put some time in discussing a potential partnership operating an Airbnb-type enterprise at one of his properties. It turned out the numbers didn’t quite work out, but was nevertheless a worthwhile prospect to discuss for both of us I think – given that everything can’t always work out. Always nice chatting with you anyway.

@Evan R., who does a lot of interesting Airbnb analysis. His research helped me, and to get ideas for my own specific-neighborhood comps when I was researching how much would be feasible to try to partner with Arlen. And for coming out to share at the Summit last November.

@Matt R, for his enthusiasm about the vacation lifestyle, and likewise, @Elizabeth Colgrove’s enthusiasm and vision for utilizing short-term rentals to make her dreams come true in the future.

Anyone have success, challenges, failures, or tips about operating their AirBnB unit? Would you recommend it to others?  Maybe some vacation rental folks or doing vrbo in Tahoe, Yosemite, Hilton Head, Miami, or maybe in urban areas like me - NYC? Austin? Portland? What do you guys  & gals think?